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Management accounts – cash flow

The final schedule of the management accounts is the cash flow. The basic format is:

Opening balance

Add: Cash receipts
o Received from customers
o Other receipts

Less: Cash payments these can be shown in the categories which are most important to the business
o Payments made to suppliers
o Net salaries
o PAYE/NIC
o VAT
o Corporation tax
o Fixed assets

Equals: Closing balance (as reconciled to the bank)

Again if this is prepared month on month any significant fluctuations can be spotted and explained.